Jim Crane says Comcast carriage offers ‘didn’t make any sense’

Astros owner Jim Crane said Tuesday the team balked at informal carriage agreements for Comcast SportsNet Houston that were proposed by Comcast/NBC Universal management because the offers were 40 percent to 50 percent less than the amount needed to keep the network solvent.

Crane, speaking a day after the Astros filed a motion to dismiss an involuntary Chapter 11 proceeding filed against the network by Comcast/NBC affiliates, said that had the team acquiesced to those deals, they would have had their games on TV but eventually would have lost their 46 percent share of CSN Houston to Comcast.

“There would never be enough money in the business to pay all the obligations,” Crane said. “They weren’t off by 5 or 10 cents. They were off by 50 cents on the dollar or 40 cents on the dollar. It was so bad that it didn’t make any sense.”

Four Comcast affiliates on Sept. 27 moved to have the parent company of CSN Houston, which is owned by the Astros, Rockets and NBC/Comcast, placed in Chapter 11 bankruptcy. U.S. Bankruptcy Judge Marvin Isgur has set Oct. 28 to hear the Astros’ motion to dismiss the case and the creditors’ motion to appoint an interim trustee to oversee the network.

Crane’s comments came during a series of briefings he and team general counsel Giles Kibbe held with reports from local news outlets to discuss the contentious bankruptcy case

Other highlights of the conversation:

– The scheduled Oct. 28 hearing, which takes two days before the Rockets’ season opener, could be delayed by the federal government’s shutdown, because the court system is guaranteed to continue operating only through Oct. 17. “It’s a concern,” Kibbe said.

– Crane said he has heard from “other interested parties” that would be willing to carry Astros games should the CSN Houston partnership come unraveled. He said, however, that those parties would be “on the sidelines” while the bankruptcy case continues.

– If the CSN Houston partnership is restructured, Crane said the Astros would be interested in increasing their 46 percent share of the company “if we thought it was a good bargain” and that current carriage agreements with Comcast, the area’s largest cable provider, remained in force.

– Crane said he is aware that the Astros are being hammered in the court of public opinion over the CSN Houston carriage problems but that the team would be affected long term by taking substandard rights deals.

“I’m fighting for the Astros and to get the games on TV and fighting for the fans so I can get a great team out there,” he said. “I didn’t buy the team to be the Oakland A’s of Houston … although I’d like to be Oakland (which is in the American League Division Series) as of today.”

Explaining his comment, he said that the A’s have to field a competitive team with a lower payroll, which makes it tougher to win games, although “it can be done. Look at the Pirates (who are in the National League Division Series).”

– There is “no tension” between the Astros and Rockets, who have not commented publicly on the bankruptcy issue, Crane said. He said the Rockets also run the risk of losing all or part of their 32 percent share in the network if there is a Chapter 11 reorganization, so “we’re all on the same economic path.”

Kibbe said attorneys for the Rockets attended the initial bankruptcy hearing earlier this month via telephone and that the Astros “will continue talking to them throughout this process.”

– Comcast/NBC, which owns 22 percent of the network, at one point offered to take the losses if the Rockets and Astros would accept lower carriage fees “and they would pick up the losses,” Crane said.

Over time, however, he said Comcast would have paid for its losses by taking away equity in CSN Houston from the Astros and Rockets, eventually owning the entire company.

In fact, he suggested that Comcast/NBC was very much aware that it could end up siphoning off the Astros’ and Rockets’ share of CSN Houston.

“I don’t know what their intention was, but it sure seems to me that they saw this coming,” Crane said. “Whether they explicitly had a plan to do that … I don’t know what they had a plan to do, but it sure doesn’t add up from anything that has been done before.”

Kibbe said the CSN Houston carriage fight is different from the situation faced by the Fox Sports Group, which agreed to launch Fox Sports 1 on DirecTV and other channels even though it did not receive the rights fee it requested.

“They (Fox) are doing that with their own company,” he said. “They can take the loss and figure it out on the other side. With what Comcast was proposing, it would have been the Astros’ loss and the Rockets’ loss. They (Comcast) would benefit on the back end, not us.”